Railways Industry in India is one of the largest ones in the world. For over 170+ years, the sector has been catering to millions of passengers every single day. From daily commutes to freight transfers, the widespread network of railways has been contributing significantly to the Indian economy’s growth.
India’s railway network has a long history. It dates back to the British colonial era, wherein the first passenger train ran from Mumbai to Thane in 1853. Since this period, the Indian Railways has grown exponentially. It is a state-owned enterprise comprising millions of miles of tracks, numerous stations, and a vast fleet of trains.
Railways in India operate passenger services, suburban trains, and luxury trains, too, connecting remote villages to major cities. Apart from passenger services, this sector plays a key role in transporting freight across the country.
Despite the growth and significance of the railway sector, often this industry has faced numerous challenges, that include funding constraints, safety concerns, ageing infrastructure, etc. However, the future looks promising for this sector, given the ambitious plans to create high-speed rail corridors, expansion of Vande Bharat Express network, modernization of existing infrastructure, enhancing passenger amenities, etc.
Due to these factors, many investors have been turning to this sector for investment. Nevertheless, it is better to stay updated with factors such as the latest developments, financial health, growth prospects, etc, before investing in railway stocks in India.
The Indian travel and tourism sector has seen a robust demand in 2023-24, and the future looks even brighter.
The national transporter aims to ferry seven billion passengers annually, projecting an increase to 10 billion by 2030.
To meet this and to eliminate waiting lists, the number of daily trains needs to increase substantially.
In a bid to meet the surging demand in passenger travel, the Indian Railways is gearing up for a massive investment of 10-12 trillions (tn) of Rupees in acquiring new trains/Augmenting Railway infrastructure over the coming years.
The Indian Railways plans to procure 7,000-8,000 new train sets over the next 10 years.
This move aligns with the broader plans of enhancing passenger and domestic goods transportation capabilities.
Currently, the railways are operating 10,754 trips daily,. To enhance this capacity , the railways expect to close 5,500 to 6,000 kilometres of new tracks, equivalent to 16 kilometres per day, by the end of the ongoing financial year.
These initiatives aim to free up tracks, facilitating faster movement of both passengers and goods.
PM Gati Shakti Scheme Gives India An Edge Over China-Morgan Stanley
PM Gati Shakti National master plan for infrastructure development brings 16 ministries including Railways and Highways together on a digital platform for integrated planning and coordinated implementation of multi-modal connectivity projects.
It is conceived as a transformative approach for economic growth and sustainable development with roads, railways, airports, ports, mass transport, waterways and logistics infrastructure constituting "7 engines " to pull the economy forward in unison.
Profile of these companies along with the products and /or services they supply to Indian railway and Last 5 years financial data is given below in a link of equity.masters com
Since the Indian railways is a state-owned enterprise, it is significantly influenced by the policies and regulations stipulated by the government. Therefore, make sure you stay updated with the infrastructure developments, tariffs, privatisation, budget allocation, etc.
Before investing any sum in railway stocks, it is necessary to evaluate the financial performance of railway companies. Run a thorough check around the revenue growth, debt levels, profitability, etc, to understand the track record of companies.
To understand the growth potential of the railway industry, make sure to monitor the technological advancements in the sector. Since growth potential indicates healthy balance sheets, therefore, keep an eye on innovation, automation, digitalization, and electrification in the industry.
Embracing such technologies helps improve safety, efficiency, and cost-efficiency, directly impacting growth. The utilisation of such tech-backed factors signifies that the railway industry is stepping up the growth ladder.
The Indian Railway industry is highly prone to regulatory risks, operational risks, geopolitical risks, etc. Therefore, we should conduct a thorough risk assessment to overcome possible setbacks.
The Indian railway sector is largely dependent on passenger and freight transportation. Therefore, you should check factors such as population growth, industrial activities, trade volumes, etc, to assess the demand for services offered by railways.
The railway industry has always been a popular choice for investment. Given its scale, government support, consistent growth, technological advancements, and diverse services, it has been evolving since its inception. These lucrative factors have often attracted investment from people around the country.
However, we must not forget that this sector is also often influenced by stringent government regulations, geopolitical factors, labour disputes, etc. This has frequently affected its market performance as a whole.
Thus, we should weigh all the possible factors before investing any sum in railway related stocks, along with considering our nvestment horizon.
.Top Railway Shares in India 2024: Railway Companies to Add to Your Watchlist
The Railways Ministry's Internal and Extra Budgetary Resources (IEBR) have fallen to Rs 13,000 crore in 2024-25 from Rs 52,783 crore in 2023-24. IEBR includes funds raised through various financing sources, including funds raised through IRFC for...
Indian Railways' 100-day plan post-elections 2024 features passenger-friendly measures like a 24-hour ticket refund scheme, a 'super App', and PM Rail Yatri Bima Yojana, alongside investments, Vande Bharat trains, modernization, and expanded metro...
Morgan Stanley has stated that the PM Gati Shakti scheme has succeeded in giving a new fillip to India's infrastructure development and multi-modal connectivity across highways, railways and ports that has spurred economic growth.
12 Likes hiren-patel 2Excellent post. Thank you very much for sharing all the minute details.
I am holding Jupiter wagon since long and recently come across other stocks like texmaco, titagarh, railtel, ircon which I am accumulating right no
Revenue figure of Texmaco, JWL looks good.
Few interesting news to look at -
Under the proposed scheme, the government plans to offer output-linked incentives to companies producing items such as wheels, brakes, transmission systems, and other parts that are typically imported.
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In an interview with CNBC-TV18, Sanjai Kumar, CMD of Railtel Corporation of India revealed projections of potential orders, with expectations ranging from Rs 4,000-5,000 crore for Kavach orders.
(I am invested, will add more as this space progresses further).
4 Likes alchemist 3Budget 2024: Industry experts predict that the capital expenditure in the railways sector is expected to increase by 76 per cent over the next five years, reaching ₹2.55 lakh crore.
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3 Likes 1957 5The order is worth around ₹750.82 crore and is expected to be completed in 42 months.
1957 6RVNL shares rose 0.46% to end at Rs 418.75 in the previous session on BSE. Market cap of the firm climbed to Rs 87,310 crore.
1 Like BejgamNishanth 7A simple picture that talks a lot, about the entire value chain for the understanding of Railway
image2174×1154 596 KB
24 Likes faisal007 9While there are dozens of railway stocks, one idea that has caught my attention is Concord Control Systems. Besides railway ancillary, the company is working on railway technology. In my personal view, the story will unfold in a big way in the next five years. My view might be biased as I am invested.
Recently, they acquired 90% stake in Advanced Rail Controls. The latter has a robust order book of 140cr. Further, Concord has 50% stake in an IISC start-up that’s working on railway safety technology.
7 Likes 1957 10As per recent policy changes, FM is the reviewer of all PSU performance, FM has authority to upgrade or down grade a PSU where the salary of board members would get affected.
She has strictly instructed Railways that the budgeted Capex plan of 2,62,000 crore should be spent in (1) Safety kavach (2) doubling of tracks (3) electrification of tracks (4) Laying of new railway lines (5).Vande Bharat trains & passenger coach.
(6)the Interim Budget for 2024-25 also provided for three Economic Railway Corridors Programmes identified under the PM Gati Shakti for enabling multi-modal connectivity, including energy, mineral, and cement corridors; port connectivity corridors, and high traffic density corridors
Railway is well known for meeting capex target for last two years.
So, all railway stocks and ancillaries are likely to do well.
Dicl: Invested for long term from lower level in a basket of railway stocks. Hence biased. Please do your own assessment before buy sell.
Finance minister Nirmala Sitharaman urged officials to focus on capacity augmentation and ensure the safety of operations of the railways.
1 Like 1957 11While several factors from the government's increased focus to valuation catch-up are responsible for fueling this rally, one of the most important factors has been the order inflows experienced by these companies. Here we look at the top railway...
1957 12 Railtel: Tracking the potential Not-so-Hidden GemsRailtel new order for Rs155 crore from Maharashtra Govt1957 13
If FII’s resort to “Sell India , Buy China” , then these counters may suffer a Setback
, unless DII , retail support these counters.
Discl: Invested from lower level in some of these stocks hence may be biased. As of now I continue to hold as i belive Railway capex story in tact and I don’t need cash.
Thus is not a buy sell recommendation. Please do your own assessment before investing
Railway stocks in Indian market have been among the top performers in past year. Titagarh and Texmaco had the highest FII holdings while IRFC and Oriental Rail had low FII holdings.
1957 14Apart from the list mentioned in the article, One more stock "CG power’"gets added to the list.
CG Power and Industrial Solutions acquired a 55% stake in G.G.Tronics India Pvt Ltd (GGT) GGT is a Bengaluru-based company that specializes in designing, manufacturing, supplying, and installing electronic safety embedded signaling systems for the railway transportation segment. One of their notable offerings is the Train Collision Avoidance System (TCA)
The Kavach system is an advanced train protection system developed by Indian Railways. It is designed to enhance railway safety by preventing collisions, ensuring train speed control, and reducing human errors.
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1957 16Railway stocks: Share price of stocks from the railway sector such as IRCTC, RVNL, Titagarh, IRFC, Jupiter Wagons, witnessed a rise in early trade on Wedesday after major announcements from the government
The sentiment is uplifted because of the recent project announced by Union Cabinet and the expectations around the upcoming Budget 2025.
1 Like 1957 17Introduction to the Grand Infrastructure Plan India’s ambitious infrastructure development plan is set to redefine the country’s future, with a projected capital expenditure (capex) of ₹100 trillion over the next five years. This monumental...
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1957 18As we approach the Railway Budget for 2025-26, railway Public Sector Undertaking (PSU) stocks are gaining increased attention
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1 Like axiskumar 20So… no bad is good news… still same pace of developments will happen in railway sector
Don’t know so much pessimism on railway stocks… but nothing changed… govt planning to spend as same as last year… which is huge in my opinion
1 Like 1957 21Agree. It is a knee jerk reaction by the market. Though the capex has not gone up , but still the capex allocation for railway is 2.52 Lakh crore same as last year is s very good amount
Market is a collection of investors of all kinds and most of them gets influenced by digital media.
The digital media said it is a shift from capex to consumption. But this narrative is not correct.
Infrastructure is the backbone of any developing economy like india and the Govt has rightly maintained the overall capex allocation of Rs11.12 lakh crore is little more than that of last year. so it is not a shift from capex to consumption.
It is just the govt has given Rs 1 lakh crore in hands of consumers to spend by giving income tax concession. So yes , people would spend this amount in various ways such as consumer durables , cars, housing , travel , eating out FMCG and so some of these sectors may do well. and some of the money may come back to stock market…So , one can not be sure which sectors or stocks would get the benefit of this money in hands of consumers. But it is expected that it may have a multiplier effect on economy and if this happens it may also encourage pvt corporates to expand operations ,/.manufacturing which would in turn help capital goods sector.
But it does not mean that Govt Capex driven stocks would get derated…Investors would not be able to ignore 11.12 lakh crore capex.
so it is a fight between 1 lakh crore consumption vs 11.12.crore capex… Market would understand gradually and then it would be driven mainly by quarterly performance
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